A Pennsylvania federal judge has approved a revised $35.5 million class action settlement resolving long-running claims accusing Toys R Us of restraining prices on baby products. More than 1.1 million claims will now be paid to consumers as opposed to only tens of thousands. Senior U.S. District Judge Anita B. Brody granted final approval to the settlement, saying the revised deal “maximizes the benefit to an enormous number of class members.” Approval of the deal follows years of contentious litigation and criticism that the settlement provided too much for Plaintiffs lawyer and too little to Toys R Us customers.
The revised settlement was necessary after the Third Circuit failed to approve the settlement in 2013, seven years after the litigation began. Judge Brody gave preliminary approval to the latest agreement in May. The settlement takes into account a ruling from the appeals court to nix the cy pres distributions to charity so that class members get a net settlement of nearly $18 million — as opposed to the $3 million allocated in the initial 2010 agreement. “Unlike the initial settlement, here the total value of claims and the exact amount that will be distributed to the class are known,” Judge Brody said.
Judge Brody did reduce the attorneys fees being sought by Plaintiffs counsel to $11,090,833 — more than $742,000 less than they had sought. In a brief, Plaintiffs counsel said they devoted nearly 85,000 hours to the case. The court fully reimbursed Plaintiffs counsel the $2,283,482 million they say they incurred between January 2006 and July 31, 2014. The Plaintiffs brought the suit in 2006 on behalf of consumers who purchased certain baby products from Babies R Us after it allegedly threatened to drop certain popular lines from its stores if their manufacturers didn’t agree to block Internet retailers from offering the same products at lower prices. The class action complaints, brought by 13 consumers, alleged that the anti-discounting actions constituted illegal vertical price restraints under the Sherman Act.
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